Sharp has announced that it is to enter into a manufacturing partnership with Taiwanese manufacturer Foxconn, with both companies agreeing to a 50-50 split in capital.
The move won't come as a surprise as many who have been keeping tabs on the home entertainment market.
Back in July 2011, there were rumours that the two companies were to begin a joint venture by the end of 2011 - although this didn't happen, it has now been confirmed that the joint venture will be created in Taiwan.
Sharp is a massive manufacturer of TV panels. When it comes to LCDs, it is the biggest in the world and rivalled only by Samsung.
The whole venture is to essentially cut costs in the manufacturing process. By putting their resources together, certain components that make up LCD panels – glass substrate and things like colour filter films – will be able to be acquired in bulk by the two companies and costs will be a lot less.
Yes, it's all to do with the economies of scale – a phrase that business students love to bandy about.
Sharp is making a push into the big screen market so it will keep focusing on this side of the market – leaving Foxconn to bring in the smaller 20-40-inch panels.
Manufacturers in Japan have had a tough time of late, so this new deal will make sure that Sharp keeps its dominance in the TV panel market.
Saying that, it is a big move for a Japanese manufacturer to hook up with a Taiwanese counterpart.
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